fund accounting

Definition

A system of accounting used primarily by non-profit or government organizations. For these and other similar organizations, it is more important for them to keep a record of how their money was spent, rather than how it was earned, unlike corporations. Their accounting records take the form of a collection of funds, each fund having a distinct purpose, ranging from operating expenses to funding the various activities of the organization.

Use fund accounting in a sentence

You should try and use a fund accounting technique so that you know exactly how much you have at all times.

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The fund accounting strategy was effective in explaining the situation to us as all records were organized and correctly documented.

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It is critical for not-for-profit entities to use fund accounting: it allows them to display to their various stakeholders how well their resources were used to meeting the entities' specified goals, which are their key performance metrics.

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